The Hindu Business Line : NREGP: Keynesian intent, ominous portents

Schemes such as these by their very nature do not lend themselves to easy verification and at the end of the day there would be nothing to show by way of a tangible asset acquired or constructed.

S. Murlidharan

In year 1936, the noted economist Keynes advocated governments to embark upon schemes involving digging of trenches if only to fill them post-haste as a means of generating employment and tackling underemployment which, in turn, he averred, would have the effect of creating purchasing power in the hands of people, crucial to fostering growth.

Varied reactions

Reaction to this suggestion ever since has ranged from solemn adherence to downright dismissal, at times contemptuous, with a few describing it as facetious and still others as fatuous.

Whatever the reaction from economists and governments, the discerning cannot be oblivious of its sublime message — growth would fizzle out in the absence of money in the hands of consumers even if takes off initially.

Inspired perhaps by Keynes, the UPA Government ushered in National Rural Employment Guarantee Programme (NREGP) in February 2006 against the backdrop of 8 per cent growth in GDP in 2004-5 accompanied by a rather disconcerting 8.3 per cent growth in unemployment.

Laying and repairing of roads, digging of canals and what have you having a bearing on improving the quality of rural life make the grade.

The intention therefore was noble — to address the festering problem of rural unemployment, more importantly, rural underemployment and simultaneously blunting the charge of elitist and urban bias in the functioning of the government.

Schemes such as these by their very nature do not lend themselves to easy verification in terms of progress or achievement made because all said and done at the end of the day there would be nothing to show by way of a tangible asset acquired or constructed.

Ghost workers

In our country as elsewhere, muster-roll manipulation has by far been the easiest and most common way of making money on the sly.

In its blatant form the abuse consists in showing ghost workers and in its refined form it consists in mulcting the ignorant by paying them less while showing more in the vouchers.

These charges, hitherto made against the private sector industries, have now come to be made against the incumbent State governments mutatis mutandis.

If industrialists generate black money through such abuse, the parties in power have been alleged to be offering doles to their faithfuls with NREGP funds with a view to either cultivating vote banks out of cultivators or with a view to rewarding grassroots party workers masquerading as rural workers.

Second, despite several layers of supervision right from the gram panchayat level, the officialdom is alleged to be making a fast buck sharing the spoils with indolent rural folks.

Lapping up the dole

The apocryphal stories doing the rounds are typical — farm workers are spurning farm work and lapping up the dole a generous portion of which is siphoned off by the babudom allegedly in cahoots with its political masters. Such charges cannot be dismissed off as born of spite.

That NREGP has started breeding shirkers is in itself an ominous portent given the fact that when people start savouring doles and spurn work, agriculture would be a casualty with the frightening potential to further exacerbate the food crisis.

In its wake, landowners are reportedly abandoning cultivation of crops in favour of growing orchards that require far less labour.

This of course is no consolation because not all of us have saintly qualities to survive on fruits alone.

(The author is a Delhi-based chartered accountant. blfeedback@thehindu.co.in)

More Stories on : Accountancy | Social Welfare

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Chinese checkers at Vienna

Pension reforms – a welcome move

Data doubts

NREGP: Keynesian intent, ominous portents

Resizing an elephant

Shut the revolving door between investment banks and Government

The economics edge

RBI’s transfers

Tackling terror